Obeid's Mercedes bought with coal money

Money from Obeid family interests in a coal-rich area of the NSW Hunter Valley was used to acquire a new Mercedes Benz car for former Labor minister Eddie Obeid, a corruption inquiry has heard.

The Independent Commission Against Corruption (ICAC) is probing whether former Labor minister Ian Macdonald rigged a 2008 tender process for coal exploration licences in the Bylong Valley, and if Eddie Obeid profited from it.

"Did you know that the money came out of the money from the sale of shares in Mt Penny?" Mr Watson then asked.

"Some money got put towards the car, yes," Mr Achie replied.

Mr Watson suggested money from Mt Penny was also used to buy Eddie Obeid's wife Judith a property in the Sydney suburb of Woolwich.

Mr Achie said it was possible money was used for that purpose but said he could not be sure.

The inquiry was told $15 million from an investment in the Bylong Valley was paid into Obeid family accounts.

Mr Achie conceded he didn't know much about the payments, despite being the trustee of the company receiving the funds.

"All I knew was ... they had done some deal regarding a particular tenement," he said.

Mr Achie, who is married to Eddie Obeid's daughter Fiona, told the inquiry he earns $55,000 per year as financial controller for the Obeids.

He said his wife, who does not work, in 2011 acquired a $1.4 million Hunters Hill unit which is yet to undergo $1 million in renovations.

"That sounds like quite a burden to take on a salary of $55,000 a year," Mr Watson suggested to the witness.

Mr Achie said the money had been lent by Obeid corporation to Fiona "in lieu of distributions" from family trust accounts.

He later denied he was a front for the family but conceded he did "not have any independent authority to make a decision".

Earlier, accountant John Campo told ICAC Paul Obeid, one of Eddie Obeid's sons, told him to give false answers to Sydney Morning Herald journalist Anne Davies, who was investigating the family's involvement in the Bylong Valley in May 2010.

Mr Campo said Paul Obeid sent him an email which he used to respond to questions from Ms Davies as if they were his own answers.

Mr Campo said Paul Obeid told him "'look as far as the newspapers are concerned just write this', which I wrote".

In his evidence, Obeid associate Andrew Kaidbay, who has acted as trustee for an entity related to the family, said he couldn't remember disobeying the Obeids.

"At this point now, have you ever disobeyed an instruction from the Obeids?" Commissioner David Ipp asked.

"I can't recall that I have," Mr Kaidbay replied.

The inquiry continues on Thursday.

This material is subject to copyright and any unauthorised use, copying or mirroring is prohibited.